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In some respite for India victims of one of the world’s biggest ever financial scams, they will now be able to claw back some of their losses from an overseas ponzi scheme with the help of global law firm, DLA Piper.
The law firm represented the Securities and Exchange Board of India (SEBI) in the second of the two proceedings before the Federal Court of Australia.
The scheme involved the Pearls group of companies and its founder Nirmal Singh Bhangoo who was accused of duping at least $8.3 billion from 58 million unsuspecting Indian investors.
It was discovered that the company had thousands of agents who lured small land owners and farmers, mostly from northern Indian states, with the promise of quadrupling their investment in ten years.
It was also found out that at least $130 million of the amassed wealth was reportedly funnelled into Australia, out of which $62 million were spent by the group in buying the Sheraton Mirage Resort and luxury properties on the Gold Coast and in Melbourne and the left over in several Brisbane development projects.
“The successful tracing of more than $100m of investor funds from India to Australia was the result of an extensive factual investigation and forensic accounting exercise,” Liam Prescott, the Litigation and Regulatory Head of DLA Piper in Brisbane, told australianlawyer.com.au.
Earlier this month, the Federal Court had ruled that $87 million from the sale proceeds of the group’s properties in Australia, will be made available to the victims under the supervision of the Australian court.
Mr Bhangoo was arrested and jailed in January 2016 along with three other directors of the Pearls group. They were all later charged with conspiracy and fraud offences.